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Carl Richards is well-acquainted with money-mistakes — not only because of his work as a certified financial planner, but also because of his personal experience.

During the last housing bubble, Richards moved to a new city, was swept up by the frothy housing market and bought a $575,000 house — well beyond the $350,000 that he and his wife had initially budgeted. He borrowed 100% of the purchase price, and was told he could borrow more if he wanted. He and his wife opened a home equity line of credit.

By the time the market started falling and he realized he needed to move back to Utah, they owed more than $200,000 on the original loan balance.

They ended up having to do a short sale.

In another previous bubble, the tech bubble, he kept a diversified portfolio and refused to let himself get into any tech stocks. At that time, he was at a big brokerage firm that did a lot of research, and he read a long report on InfoSpace.

“I was like, nope, I won’t do it, nope, I won’t do it, nope, I won’t do it, nope, I won’t do it, and finally, and I took $10,000 which was a lot of money then and is a lot money now, and I bought InfoSpace,” he says. His stock is now worth $81.

He jokes that the lesson he learned was that, “if you throw in the towel on your plan, at least do it early.”

From his mistakes, Richards knows the value of creating the right plan and sticking to it. He’s now out with a new book, “The One-Page Financial Plan,” which was inspired by a common question he would field from friends and family who, say, in the last five minutes of a night out, after the bill was paid, wanted to get advice on how they should manage their money or invest their 401(k), or on other money matters. (Read the 10 reasons why financial plans aren’t just for the 1%.)

Here are the simplest tips he has for getting what you want from your money, with the hardest one at the end.

1. Ask why money is important to you.

When his friends would ask him for money advice in those few minutes, “I was giving people prescriptions with no tools to diagnose,” he says. He cites a quote by Stephen Covey, author of “The Seven Habits of Highly Effective People,” who said, “It’s easy to say ‘no!’ when there’s a deeper ‘yes!’ burning inside.”

Knowing why money is important to you will guide you on every financial planning decision moving forward, Richards says. One driven, type-A ER doctor was surprised to find herself saying that money was important to her because she wanted to have time to raise a family. Once she and her husband identified that, they could begin to make financial decisions that lined up with their values.

“It’s easier to say no to things when you have a much bigger yes,” he says.

When Richards and his wife did this exercise, they decided they had three major goals: 1. Fully fund their retirement accounts every year, 2. Fund their kids’ education accounts every year, 3. Save for a house. This was their one-page financial plan.

Knowing where you want to go will enable you to ask for the directions.

Richards says he chose the word “guess” to acknowledge that people don’t really know what will happen — especially on the 20- or 30-year time frames sometimes addressed in financial planning. “I’m trying to give everyone permission to relax a little bit,” he says.

No matter what, don’t throw your hands up completely and say that since you can’t predict the future, you won’t make a guess at all. Make a projection, but don’t worry about getting it “right,” he says. If you need to course-correct later on, do so.

3. Know your starting point.

In order to get where you want to go, it’s important to know your net worth — how much you have in assets, and what your liabilities are.

Though this might seem like a straightforward step, Richards says it can become emotional quickly. “It’s just facts, but you’ve got to realize, every single line on that balance sheet tells a story,” he says. Your list of debts may include one for a failed venture, so you may think about what a dumb move that was, and your spouse might be tempted to nod his or her head in agreement.

Some people may even be so ashamed of their past actions they will feel like avoiding this step. For instance, one woman who borrowed $8,000 a few decades earlier for a student loan had spent years not facing it, and when she finally checked in on it, it had swelled to $40,000.

So, he says, focus on learning from those mistakes and on moving forward — not on pointing fingers, wallowing in guilt or engaging in avoidance.

4. Think of budgeting as a tool for awareness.

Often, people base spending decisions on emotional reasons, and then go looking for evidence to support that decision. Instead, he says, we should be more deliberate about our purchases. Budgeting can help to turn around bad spending habits, but it shouldn’t be seen as a punishment.

He says budgeting should instead be seen as a tool for tracking spending. “The process of tracking will equal awareness and awareness will equal behavioral change,” he says, leading your spending to align with your goals.

5. Save as much as you reasonably can.

Once, when Richards asked his coworker if he was saving enough for his child’s college education, his colleague responded, “Carl, how about this: I’m saving as much as I reasonably can.”

Richards finds this advice more useful than recommending one save a specific percentage of money. If you have a spending problem, then you may want to institute some rules like holding new purchases to a 72-hour test during which the items sit in your shopping cart online and you see if you still want them 72 hours later.

But, overall, “If you do this early work, where you’ve gotten clear with your values, and you have some awareness, then savings is a natural outgrowth of that,” says Richards.

6. Buy just enough insurance — today.

People make two mistakes with life insurance. First, they put off buying it — either because it doesn’t seem urgent if their health is good or because it involves having a conversation most people would rather avoid. Or, they let fear drive their decision when purchasing life insurance.

“[Life insurance] is about replacing economic loss, not emotional loss,” says Richards, “so if you view it in that cold hard light, you just have to calculate what that loss will be and find the cheapest insurance to do that job.” For the vast majority of people, a term policy, which is like renting life insurance for a certain time period, is best. Be sure not to put off buying it.

7. Remember that paying off debt can be a great investment.

“We’re notoriously bad at calculating the cost associated with borrowing,” says Richards. He has a friend who, in college, needed a tent to go camping, so he bought one on his credit card. He guessed that, 10 years later, the interest had ballooned so much that it was equivalent to a down payment on a house. “It was the most expensive tent in history,” says Richards.

He eschews the calculations that claim that paying off debt is an expensive use of money when it can instead be invested. “Look, paying off debt is a great investment,” he says. (If you’re wondering how to balance debt repayments with retirement contributions, read this article.)

8. Invest like a scientist.

Richards has a doctor friend who once said to him, “If I practiced medicine the way I invest, I would have killed half my patients.” Before prescribing anything he’d read peer-reviewed studies to gain confidence he was making the right choice, but with investments, he’d get recommendations from friends and go with gut feelings or by what he heard on the news without doing his own research.

“We can actually look at the data and separate out the speculating and the entertainment circus,” says Richards. The basic formula for successful investing, he says, is, first, to diversify your portfolio. This means: go with index funds or exchange-traded funds that contain hundreds of stocks, instead of one or two or even ten stocks. This lessens the risk any one stock can hurt you. (Read about the 7Twelve strategy for diversifying your investments, and see how to invest in stocks without too much risk.)

Second, keep your costs low. Research shows that there is only one reliable predictor of how well an investment performs: cost. “The more you pay for your investments, the less money you’ll end up keeping,” Richards writes. So, look for inexpensive securities. (Here’s more information on the importance of keeping your investment costs low.)

Third, recognize the correlation between risk and reward. The greater risk you take, the higher potential return. This doesn’t mean to bet it all on one stock, but to recognize you’ll likely earn more for stocks than for bonds, that you’ll probably make more via small companies than large ones, and that you’ll most likely have greater returns from financially weak companies than strong ones.

9. Hire a real financial advisor.

Richards says it’s difficult to be unemotional about your own money. That’s the real purpose of having an advisor.

“You don’t hire a financial adviser because you’re not smart enough to do this yourself,” says Richards. “You hire one because they’re not you.” He or she will help get between you and any potential mistakes you may make, even if you were to be in danger of making financial blunders every five or ten years.

“The portfolio you build matters a lot less than sticking with it,” says Richards, who learned this the hard way with his $10,000 InfoSpace mistake.

“It’s relatively simple, the math side of it,” Richards says. “It’s the psychological side that seems to be really hard for people.”

Having the plan in the first place will help you stick to your goals. He also recommends automating your decisions so you don’t have to rely on yourself to keep making good choices over and over again. Then, be sure to leave your plan alone. “Would you ever plant a tree and then go in every month and dig it up to see how the roots are doing?” he writes. “Investing is one of those cool, rare things where we actually get rewarded for being lazy.”

I’m a crypto/blockchain journalist and host of the Unchained and Unconfirmed podcasts. I’m working on a book about the history of the crypto space to be published by

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I’m a crypto/blockchain journalist and host of the Unchained and Unconfirmed podcasts. I’m working on a book about the history of the crypto space to be published by PublicAffairs/Hachette. As a former senior editor of Forbes, I was the first mainstream reporter to cover crypto assets full-time. I graduated Phi Beta Kappa with Honors from Stanford University and have a master of arts from Columbia University’s School of Journalism. Sign up for my crypto newsletter at https://unchainedpodcast.com.